Stocks Rebound Ahead of Jobs Report

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U.S. equities pushed higher on Monday, recovering much of the losses from Friday’s post-Yellen decline. Trading was relatively quiet ahead of Friday’s eagerly awaited August payrolls report — which comes just ahead of the long Labor Day holiday weekend — as investors look for further clues on the odds of a possible September interest rate hike.

In the end, the Dow Jones Industrial Average gained 0.6%, the S&P 500 Index wafted up 0.5%. the Nasdaq Composite added on 0.3% and the Russell 2000 finished 0.6% stronger. Elsewhere: Treasury bonds rallied, the dollar was little changed, gold gained 0.1% and crude oil lost 1.4%.

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Financials led the way, rising 1% despite a narrowing of net interest margins. Healthcare stocks continued their recent underperformance on political headwinds, rising just 0.3%. The rise boosted Bank of America Corp (NYSE:BAC) over the $16-a-share threshold for the first time since early January, lifting the Sept $15 BAC options straddle recommended to Edge Pro subscribers to a gain of 20%.

The Regional Banking SPDR ETF (NYSEARCA:KRE) is up more than 3% for Edge subscribers since recommended on Aug. 16 as the exchange-traded fund returns to levels not seen since 2015.

Herbalife Ltd. (NYSE:HLF) gained 4.6% after Carl Icahn said after the close on Friday he hadn’t sold his stake, but bought another 2.3 million shares. Caesars Entertainment Corp (NASDAQ:CZR) fell 15.7% after the NY Post reported the mediator for the company and its creditors said he thinks the judge will find in favor of creditors.

On the economic front, U.S. personal income and spending were in line with expectations for the fourth consecutive monthly increase. The savings rate increased slightly to 5.7% from 5.5% previously. In overseas news, U.K. Prime Minister Theresa May has committed to the Brexit process, brushing aside calls for a second referendum on leaving the European Union.

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Looking ahead to Friday, analysts are looking for an August payroll gain of 175,000 vs. 255,000 in July and 292,000 in June. The unemployment rate is expected to fall to 4.8%.

While still respectable, the result could be enough to justify a “no hike” decision in September. No matter, really, since stocks have found a reason to rally on job report days lately no matter the result.

Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. A two-week and four-week free trial offer has been extended to InvestorPlace readers.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/08/jobs-report-financials-bac-stock-market-today-nyse-dow-jones-industrial-average-investing-news-5/.

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